Info

Problem 3-18 (LO 2, 5) 80%, second year, complicated excess. Refer to the preceding information for Fast Cool's acquisition of HD Air's common stock. Assume Fast Cool issued 35,000 shares of its $20 fair value common stock for 80% of HD Air's common stock. Fast Cool uses the simple equity method to account for its investment in HD Air. Fast Cool and HD Air had the following trial balances on December 31, 20X2:

Template CD

Template CD

Accounts Receivable

Inventory

Investment in HD Air

Buildings

Accumulated Depreciation

Equipment

Accumulated Depreciation

Goodwill

Current Liabilities

Mortgage Payable

Common Stock

Paid-In Capital in Excess of Par . . Retained Earnings, Jan. 1, 20X2 .

Sales

Cost of Goods Sold

Depreciation Expense—Buildings . Depreciation Expense—Equipment

Other Expenses

Interest Expense

Subsidiary Income

Dividends Declared

Totals

Fast Cool

HD Air

392,000

99,000

200,000

120,000

120,000

95,000

60,000

50,000

776,000

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